The ACCC has put telcos on notice in a year where it feels like it’s had to pull them up on misleading advertising every week. Its latest salvo warns companies to make sure their advertising is clear and not misleading – threatening vastly increased penalties for companies that mess up.
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The ACCC message contains a laundry list of recent bad telco business, with the ‘unlimited’ saga first and foremost among complaints. Earlier this year the ACCC took action against Optus, Telstra AND Vodafone for all offering ‘unlimited’ plans that actually limited connection speeds once the initial allowance was used up. The disclaimers provided were not prominent enough to offset the misleading ‘unlimited’ headlines.
Simultaneously a Federal Court case brought against Telstra by Optus found that this wording was in breach of Australian consumer law, and specifically targeted the Telstra tagline: “One word for Australia’s best mobile network. Unlimited.”
This isn’t the first time ‘unlimited’ plans have been targeted either. All the way back in 2010 the ACCC took Optus to court over misleading unlimited plans, and back then it was found to be in breach of consumer law too.
Since this year’s actions all three telcos have stopped using the ‘unlimited’ branding, but that doesn’t mean the ACCC trusts them to continue on the straight and narrow. It also lists “a wide range of actions against telecommunications companies” recently, including dodgy NBN speed claims by Optus, Telstra, iiNet and Internode, Optus’s misleading advertising over transitions to the NBN and Telstra’s misleading third party charges.
Penalties for breaching Australian Consumer Law have been raised since September 1, with the cap now at $10 million, with charges to be calculated based on “three times the value of the benefit received, or where the benefit cannot be calculated, 10 per cent of the annual turnover in the preceding 12 months.” Charges for individuals, such as executives who approve misleading advertising, have been raised from $220,000 to $500,000.
“With much higher penalties now available for breaches of consumer law, I hope they will take their obligations more seriously.” ACCC chair Rod Sims said.
“We have taken a range of actions against telecommunication companies for misleading consumers. It is about time they showed more respect for their customers and the Australian Consumer Law.”